Bookmark and Share

DB, PERS/TRS Plan FY07 and FY08 Contribution Rates

Previous years' rates

The Alaska Retirement Management Board (ARMB) met on June 14, 2007, in Anchorage and adopted Fiscal Year 2008 (FY08) contribution rates for the Defined Benefit (DB) plan and for the Defined Contribution Retirement (DCR) Plan for the Teachers’ (TRS) and Public Employees’ (PERS) Retirement Systems.

You should have received a letter from the Commissioner of Administration, Annette Kreitzer, with your specific FY08 employer contribution rate. The letter was addressed to your payroll and administrative contacts. The rates are effective for pay period end dates between July 1, 2007, and June 30, 2008, for members of the PERS/TRS Defined Benefit plan.

The Division would also like to give you some additional information on the new rates. In setting the Defined Benefit (DB) plan rates, the board addressed compliance with legislative funding appropriations contained in Senate Bill 53 (Capital Budget - Section 55) and House Bill 95 (Operating Budget - Section 15) to provide relief for PERS employers. The FY08 rates PERS employers will actually pay (Employer Effective Rate) were set at no less than 14.48 percent for PERS employers whose actuarially calculated rate is less than 22 percent, and no more than 22 percent for PERS employers whose actuarially determined rate is greater than 22 percent. The Defined Benefit plan employer rates for the PERS and TRS are outlined in the table below (click on links):

PERS/TRS DB Plan - FY 2008 Contribution Rates
(PERS Tiers I/II/III and TRS Tiers I/II)
PERS (P)* and (A)* TRS
*P = Peace officers/firefighters
*A = All others
ARMB Adopted Rate See Column 1 of the
FY08 PERS Employer Rates (PDF)
12.56%
Employer Effective Rate See Column 2 of the
FY08 PERS Employer Rates (PDF)
12.56%
Rehired Retiree Rate (Waivered Employees)** See Column 3 of the
FY08 PERS Employer Rates (PDF)
12.56%

**Per AS 39.35.270 (c) and 14.25.070 (c) the Rehired Retiree Rate, defined as the Past Service Rate, is provided via the valuation process, and is limited by HB 95 and SB 53 to be no less than zero and no more than 22 percent for PERS, and equal to the Normal Cost Rate for TRS.

SB 123 requires that the PERS and TRS Defined Benefit rate be applied to both DB and DCR salaries. However, in some cases, the Defined Benefit effective rate will not be sufficient to cover all required DCR contributions. All DCR Plan employer contribution obligations are required. Employers will pay either the effective rate or the DCR required rate plus the Health Reimbursement Arrangement (HRA), whichever amount is greater.